BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
SB 1741 - Bowen Hearing
Date: April 11, 2000 S
As Amended: March 30, 2000 FISCAL B
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DESCRIPTION
Current law requires the California Public Utilities
Commission (CPUC) to develop and implement any measures it
deems available to efficiently allocate telephone numbers.
This bill requires the CPUC to request authority from the
Federal Communications Commission (FCC) to order telephone
companies to assign telephone numbers dedicated to wireless
and data usage to a separate area code and to permit seven
digit dialing within the affected area codes. If the CPUC
is granted this authority, then the first new area code
within an area must be used exclusively for wireless and
data, while subsequent new area codes within that area may
be either geographic splits or overlays.
This bill requires that before the CPUC creates any new
area code it must first perform a telephone number
utilization study and implement all reasonable telephone
number conservation measures.
BACKGROUND
Coming Soon: Your Own Personal Area Code . After starting
with three area codes in 1947, California had 13 area codes
in 1992, which mushroomed into 25 area codes by the end of
1999. At the current pace, the CPUC expects California to
have 41 area codes by the end of 2002. The Los Angeles
area has been at the leading edge of area code expansion,
with the number of area codes tripling since the early
1980's. The San Francisco Bay Area is not far behind -
until recently it had four new area codes set to take
effect by the end of this year.
The growth in the number of area codes has several
practical implications in people's every day lives as phone
users are forced to adapt to new dialing habits, re-program
their telephone devices, dial more calls using 11 digits
rather than the traditional 7, and more. Businesses are
often forced to change stationery and advertisements, as
well as lose any "equity" they may have built up with their
long-standing telephone numbers.
Reasons Behind The Area Code Explosion . The growth in the
demand for new area codes can be attributed to three basic
realities:
First, deregulation and the emergence of new telephone
companies has dramatically increased the demand for new
telephone numbers, as these new companies all need their
own numbers to sell to customers. For example, in the
early 1980's there were only a handful of telephone
companies needing telephone numbers in the 310 area code.
Now, 53 telephone companies have the right to demand an
allocation of telephone numbers in the 310 area code alone.
Second, technology has made new forms of communications
available and affordable to people and businesses. Most
people no longer have just one home number and one work
number - they have numbers dedicated for pagers, wireless
telephones, internet service, and fax machines.
Furthermore, some of the "point of sale" credit card
verification terminals that have popped up at grocery
stores, gas stations, and other merchants require their own
phone lines.
Third, the FCC regulations on how telephone numbers are
handed out to companies haven't kept up with deregulation
or technology. For example, until recently the FCC only
allowed numbers to be handed out in blocks of 10,000 - even
if a telephone company only has a single customer. So, as
a result of the emergence of new telephone competitors,
more blocks of 10,000 numbers are being handed out (thus
draining the pool of available numbers more quickly), and
as a result of people's use of new technologies that
require dedicated phone numbers, the numbers within those
blocks are being exhausted more rapidly.
The Long Arm Of The Law . California is not free to deal
with telephone numbers in any way it sees fit because
Congress has given the FCC the responsibility for telephone
number administration. Consequently, the FCC has limited
the states' discretion when it comes to dealing with
telephone numbering issues.
For example, the FCC prevents states from allocating
telephone numbers on the basis of technology (i.e. separate
area codes for cellular telephones and pagers), known as a
technology overlay or a service specific overlay. It also
requires that whenever an overlay area code (described
later) is created, all calls within that area code and the
overlaid area code require 11 digits to be dialed with
every call. The CPUC has requested that the FCC permit the
use of service specific overlays but has not requested
implementation of 7-digit dialing.
Responding to widespread public concern, including requests
from the Chair of this committee, the CPUC and other
states, the FCC in September 1999 granted California the
authority to allocate numbers in blocks of 1,000 rather
than 10,000. On March 17, 2000, the FCC announced it had
endorsed a national policy of allocating telephone numbers
in blocks of 1,000, rather than 10,000.
Overlay vs. Split . Historically, new area codes have been
created by geographically splitting existing area codes,
which forces people and businesses located in the "new"
area to get new telephone numbers. This is obviously
inconvenient for people and businesses that have to
re-program machines, let their friends or customers know
about the new number and, in the case of a business,
reprint stationery, change advertisements, and much more.
A long-discussed alternative way of creating a new area
code is the "overlay," where a second area code is laid on
top of an existing area code. The main advantage of an
overlay is no one is required to change their existing
telephone or fax numbers - only people getting new numbers
would receive the new area code even though they'd
physically be located in the "old" area code territory.
The primary downside is that everyone has to dial eleven
digits (1 + area code + phone number) on all telephone
calls - even when calling a person in the same area code,
which is a federal regulation adopted at the behest of many
telephone companies. More fundamentally objectionable to
many people is that in an overlay, a person could have two
different area codes in their own home, which goes against
the entire concept of what everyone understands an "area
code" to be. The CPUC had previously proposed overlays in
many area codes in the state, but earlier this year it
withdrew those proposals and instead opted for a strategy
of forcing the telephone companies to utilize their
existing numbers more efficiently.
Utilization Studies Find Unused Numbers . As part of its
analysis of the need for a new area code in the 310
territory, the CPUC performed a telephone number
utilization study. The 310 has been on the bleeding edge
of area code controversy, as it was the first area code for
which a geographic overlay was proposed. That study found
that there were as many as three million unused telephone
numbers which could be used by customers - a surprising
amount of available numbers in an area where telephone
number resources were supposedly so exhausted that a new
area code was to have been implemented in August 1999. The
CPUC now believes that a new area code in the 310 won't be
needed until at least June 2001.
COMMENTS
1. Just How Should You Do The Splits? This bill has two
basic parts. The first, non-controversial, provision deals
with ensuring that telephone numbers are utilized
efficiently before asking customers to put up with a new
area code. The second part is designed to require the
CPUC to use a "technology overlay" instead of doing a
geographic split or a geographic overlay once all of the
conservation measures have been exhausted and creating a
new area code is unavoidable.
Assuming the FCC permits California and other states to use
technology overlays (the city of New York is the only
entity using the technology today), this bill requires the
CPUC to adopt a service-specific technology overlay once it
determines that a new area code is indeed necessary.
2. Tall, Yet Short; Specific, Yet Vague . While this bill
directs the CPUC to adopt a technology overlay before
entertaining any notion of doing a geographic split or
geographic overlay, the bill is silent on how the CPUC
should accomplish that goal.
Should a technology overlay apply to all existing customers
or only to new numbers? Should the state be split into
"technology overlay" regions or should the issue be
addressed on a case-by-case, code-by-code basis? Should
data lines be moved before, after, or in concert with
wireless numbers to a new area code?
While the bill could certainly lay out specific steps the
CPUC would have to take when imposing a technology overlay,
the author has chosen to allow the CPUC to retain its
flexibility so it can determine exactly who should be moved
to a new "technology overlay" area code, how, and when.
3. Can't The CPUC Do This On Its Own? The CPUC could,
assuming FCC approval is given, adopt the provisions of SB
1741 on its own. However, directing the CPUC to do it via
legislation has two benefits. First, assuming the bill is
passed and signed into law, it gives the CPUC legislative
direction. Second, and more importantly, it lets the
public and the telecommunications industry know how area
code splits will be dealt with in the future so they can
begin preparing for that eventuality now.
4. No Matter How You Slice The Pie, Someone Is Going To
Dial 11-Digits . Anytime a new area code is created,
someone is obviously going to have to dial 11 digits to
reach a person in the old (or new) area code territory.
Under the current system, everyone - land-line and wireless
customers - has the potential to be inconvenienced in a
relatively equal fashion.
Assuming the CPUC shifts wireless telephone users to their
own area code, those users would bear the brunt of the
inconvenience because they'd be forced to dial 11 digits
for every call they make, unless of course, they're calling
another wireless telephone.
5. Sounds Good, But What Happens If . . . Thinking ahead,
if the CPUC were to put all wireless and data lines into
their own area code as this bill requires and then the
underlying "land-line" area code runs out of numbers, this
bill requires the CPUC to do a geographic split or
geographic overlay. In that event, a given area might wind
up with three area codes instead of the two it would
otherwise have using the current system. The notion has
been raised that in such an instance, instead of splitting
the land-line territory, the CPUC should be required to put
new land-line numbers into the area code reserved for
cellular and data lines, assuming there are extra numbers
available.
This has some obvious appeal because it has the possibility
of pushing any "geographic split vs. geographic overlay"
debate further out into the future. On the other hand, by
mandating that all new land-lines be put into the
wireless/data line area code, what it does is effectively
force the CPUC to adopt a geographic overlay. With that
comes all the problems associated with the traditional
geographic overlay, such as having two different area codes
in the same house, etc., and it arguably defeats the
purpose of having a technology overlay in the first place.
Mandating that the CPUC use numbers in this manner is
somewhat problematic because, as noted in Comment 2, the
CPUC will have complete discretion over how it sets up the
technology overlay system and depending on the system it
adopts, this type of a mandate may not mesh with the CPUC's
plan.
POSITIONS
Sponsor:
Author
Support:
County of San Diego
Office of Ratepayer Advocates
Oppose:
AT & T
GTE California Incorporated
Cellular Carriers Association of California
MCI WorldCom
Randy Chinn
SB 1741 Analysis
Hearing Date: April 11, 2000